Yorkshire expects hostile bid

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The Independent Online
YORKSHIRE Electricity is this weekend on full alert for a pounds 1.2bn- plus hostile bid following a further massive surge in its shares on buying by US brokers Bear Stearns and Merrill Lynch on Friday.

The leap, 44p to a record 889.75p, means Yorkshire's shares have risen by over 30 per cent this year.

Scottish Hydro Electric and General Public Utilities of the US are the two firms tipped as most likely to bid, possibly in a joint venture.

New Jersey-based GPU, owner of the Three Mile Island nuclear plant, is likely to face searching scrutiny over its record after the accident at the reactor in 1979.

Any move, though, is thought unlikely until the Monopolies and Mergers Commission delivers its verdict shortly on bids for Southern Electric and Midlands Electricity by National Power and PowerGen respectively.

"We saw a lot of activity by US arbitrageurs, buying late Friday afternoon," one source close to Yorkshire Electricity said. "We think there is a US utility building a stake in anticipation of a clearance of the mergers at the end of this month," the source said, adding that no formal approach had yet been received.

Yorkshire, one of only three of the 12 privatised electricity companies not to attract a bid, has been shoring up its defences since the bid frenzy began in December 1994.

Hanson is thought to have come close to a bid, before opting for Eastern Electric last year. Of the other independents, Northern is saddled by debt, London Electricity has a high urban cost base, while East Midlands chairman Nigel Rudd is likely to mount a stiff defence against any hostile move.

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